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May 2011 B.C. Economic Fundamentals

Ally

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News articles for May 2011.
 

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What's next for Vancouver's hot housing market?



Investments by Chinese are playing a role in helping to buoy the hottest real estate market in Canada, according to local realtors. The additional demand may be helping to underpin a market whose prices seem to impossibly levitate above the typical local incomes in the region. (Read more in David Ebner's story: Foreign buyers buoy Vancouver housing)




Are Vancouver's high housing prices sustainable? What's next for the city's real estate market?






Vancouver-based reporter David Ebner hosted a live discussion with John Lichtenwald, owner of Metro Vancouver Properties -- a collection of seven Re/Max offices in the Vancouver region.





The company sold $3.7-billion of residential real estate in 2010, the most of any multi-office Re/Max outlet in the world. Mr. Lichtenwald, who has been in real estate for the past quarter century, estimates that about of a sixth of his firm's buyers are foreign, led by those with China roots.





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Say 'no' to California dreams, nightmares





Christy Clark's new cabinet would be crazy to say "yes" to Californiastyle cap and trade (often referred to as the "WCI market"). All four of the American states that originally joined British Columbia and California to develop a common carbon market - Washington, Oregon, Arizona and New Mexico - have withdrawn from WCI. They have done so because the market rules imposed by California [and accepted, to date, by B.C.] benefit only California, entirely at the expense of all energy, building product and food exporting states.




B.C. has the most to lose in this scheme, and should have been the first to withdraw. The Clark government still has time to make the right decision.




First, what is "cap and trade"? This is a quota-based supply management regime that works exactly the same way our existing dairy quota regime works except, of course, that the dairy quota system covers only milk, butterfat and cheese production and sales. California cap and trade covers all B.C. production and sales of energy, building products [cement, aluminum, wallboard] and food. In other words, 90 per cent of the economic activity in this province will fall under the quota system.





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For best mortgage deal, move to B.C.



Mortgage rates are near all-time lows but for the best deal, move to British Columbia.





The province has Canada's most expensive housing but its residents are getting rockbottom rates thanks to a ferocious battle between B.C.'s credit unions and the banks.





B.C. home prices, Vancouver in particular, have long outpaced the rest of the country. The Canadian Real Estate Association said nationally home prices were up 8.9% in March from a year ago, but take out B.C. and the percentage shrinks to 4.3%.





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Home prices are gliding to a pause - except here





Although home prices remain overvalued across Canada, they seem headed for a period of stagnation rather than a sell-off.




March data from the Canadian Real Estate Association showed average urban prices up by a modest 4.3 per cent, if you exclude the rocket-propelled Vancouver market (it was up by a remarkable 13.4 per cent from an already very high level).




By comparison, Canada's other major metropolitan areas had price gains less than half the size of Vancouver's. Montreal was up by 4.6 per cent over the past year, Toronto by 4.9 per cent.




Outside of British Columbia, then, we're getting an encouraging signal that the market is cooling gradually, something that could allow price gains to slow while incomes catch up -all without the need for any disconcerting drops.





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Cambie Corridor Plan: A model for sustainability





Since July 2009, the City of Vancouver has spearheaded the most extensive public consultation process seen in years to determine its plans for development along the Canada Line.




Along Cambie Street, from 16th Avenue to the Fraser River, the Cambie Corridor connects the communities of Marpole, Langara, Oakridge, South Cambie and Riley Park with the downtown peninsula, Richmond and Vancouver International Airport. This corridor represents Vancouver's opportunity to leverage $2 billion of transit infrastructure to create a model of sustainable transit-oriented development. It also supports our shared goal of becoming the world's greenest city by 2020.




In recent days, the city released its draft of the proposed Cambie Corridor Plan. While this plan should have been developed years ago, what has emerged is an ambitious and necessary approach to development within our city. The plan demonstrates an understanding of the synonymous relationship between sustainability and healthy urbanism; an understanding that balances the ideals of tomorrow and realities of today with both pragmatism and ambition.



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There is a role for log exports to maintain B.C.'s industry





In spite of two political party leadership contests in British Columbia, the Truck Loggers Association has worked hard to maintain its longstanding policy of taking a non-partisan approach to politics. More than 400 companies with some 8,000 employees with diverse viewpoints rely on us, so we think our impartial approach has earned us some measure of credibility when we speak about issues that are politically charged.




Recently, newly minted B.C. New Democrat leader Adrian Dix promised that if he were elected premier he would "take direct action" against log exports. Not only is this a tired piece of partisan rhetoric, but it would damage our coastal forest industry, its workforce and ultimately forest management. For those reasons we cannot let his position go unchallenged.




B.C.'s forest industry largely built our province and it continues to support tens of thousands of families today. While its economic importance may have fallen in relation to some other sectors, its environmental significance alone guarantees that it retains its longstanding title as "B.C.'s most important resource industry." Our forests not only provide the world with the most managed, sustainable, affordable and globally accepted building material, they are also globally significant in terms of addressing climate change issues. B.C. voters need to be aware of forest management issues and they should encourage their politicians to support sensible policies.





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'Fracking' starts to bring on legal challenges



A controversial method of drilling for natural gas that has revolutionized the industry is confronting a growing backlash across North America, and the fast-spreading technique faces a legal test in Canada`s oil and gas heartland.





In the latest sign that pressure against the practice, known as `fracking,` is mounting, a Southern Alberta woman filed a $33-million lawsuit alleging that nearby drilling by Encana Corp. (ECA-T31.08-0.25-0.80%)is responsible for contaminating her water with enough methane that it can be lit on fire.





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Fraser Valley home sales return to balanced conditions in April





METRO VANCOUVER - April home sales in the Fraser Valley have returned to balanced conditions, with sales decreasing 15 per cent from April 2010's 1,793 units to 1,516 units this year, although the White Rock/South Surrey area was particularly active.







`April`s sales are pretty typical for that month over the last two decades with the 20-year average being 1,580, but softer than what we saw earlier this year,` Fraser Valley Real Estate Board president Sukh Sidhu said in a statement Tuesday.







`The Fraser Valley market was busier than normal in February and March due in part to the tighter credit conditions that kicked in on March 18, plus you add into the mix a focus on the federal election and you get an April that trends back to normal conditions.`



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Metro Vancouver home sales down 8% from a year ago





Metro Vancouver home sales reached 3,225 in April, an 8.2-per-cent drop from April 2010 and a 21-per-cent decline from March 2011.







According to the Real Estate Board of Greater Vancouver, the numbers reflect a "solid" month of sales following the near-record pace in the two previous months.







"While it continues to be a seller's market in Greater Vancouver, last month's activity brought greater balance between supply and demand in the overall marketplace," REBGV president Rosario Setticasi said in a statement. "The year-over-year decline in April sales can be attributed to a less active condominium market, as there were more detached and townhome sales this April compared to last year."



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Europe's carbon policies bolster a B.C. bioenergy industry





When Regina and Peter Pretterhofer built their new home in the city of Graz, Austria, they decided to give up fossil fuels and adopt a nationwide trend toward alternative energy to keep them warm during the snowy Austrian winters.




Instead of a gas furnace, their home has a three-metre-bythree metre room in the cellar that is filled to the top with four to six tonnes of wood pellets every two years, which are automatically fed into an Austrian-designed pellet-burning furnace in the next room. It heats their water and warms their 2,300-square-foot home. The pellet furnace is augmented by solar panels on days when the sun shines, and is made efficient by triple-glazed windows and insulation derived from local wood byproducts.



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Rental home shortage acute, coalition warns




Metro Vancouver leaders are adding their voices to a new coalition calling for reforms to increase the supply of rental housing in the region.










Groups representing tenants, landlords, home builders, realtors, developers and non-profits have formed the Rental Housing Supply Coalition to push for changes.










Co-chair Wayne Wright, the mayor of New Westminster, said the rental shortage in the Metro region is reaching a crisis point.










"We just won't have workers," he predicted at an April 29 Metro board meeting. "We have 40,000 people a year coming in and there's no housing for them. That's the kind of thing that breeds anarchism."





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Victoria home sales decline in April





April was a washout for real estate sales in Greater Victoria.


Despite the arrival of spring, when the market traditionally picks up, the total number of sales last month came in at 574, down from 622 in March. April's total sales also trailed the same month last year when 756 properties changed hands.




"Tighter credit conditions and anticipated higher mortgage rates have and will have some moderating effect on the market and prices are expected to remain relatively flat and stable for the time being," Dennis Fimrite, Victoria Real Estate Board president, said in a statement Monday. Inventory of properties for sale rose to 4,561 in April, from 4,100 in March, an increase of eight per cent from April 2010.




The average price of a single-family home in April was $615,533, down from $619,275 in March.





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Vancouver considers higher-density housing plans for Cambie Street corridor





Vancouver is considering a comprehensive land use plan for five neighbourhoods along the Cambie corridor and Canada Line that will fundamentally alter the way the area looks and develops.




From 16th Avenue to Marine Drive, postwar bungalows, ranchers and modest single-family homes have long occupied most of the frontage of Cambie's wide heritage boulevard. But under a proposal now before council, over the next 30 years the corridor would transform into a series of denser "transit-oriented" neighbourhoods with multiple-unit condos ranging from four storeys in the north to 12 storeys at Oakridge to 36 storeys at Marine Drive.




The plan, which could see as many as 14,000 new residents in the corridor by 2040, would capitalize on the new Canada Line and result in taller buildings lining the corridor. It is being supported by developers and hailed as visionary planning by some of the city's leading architects.





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B.C. businesses lobby Metro Vancouver for growth plan changes



METRO VANCOUVER - B.C.'s three biggest business groups are hoping to use an impasse over the controversial Metro Vancouver regional growth strategy as a last-ditch chance to change the plan.




The business groups' attempts to enter the fray arose after the provincial government last week ordered Metro to engage in a 60-day nonbinding dispute process to deal with the City of Coquitlam's concerns about the regional plan, starting by May 16.




The B.C. Chamber of Commerce, Business Council of B.C. and the Urban Development Institute have now asked Metro municipalities to allow them to participate in the dispute process, saying they weren't given the chance to be heard during four years of public consultations.



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B.C. economic snapshot for May 6, 2011



VANCOUVER, BC, May 7, 2011/ Troy Media/ ` According to yesterday`s Statistics Canada`s labour market report, estimated employment in B.C. grew by 8,900 persons or 0.4 per cent from March to reach 2.27 million individuals. The province has nearly recouped all job losses recently observed in December and January.





Employment growth outpaced gains in the labour force during the month, contributing to a moderate decline in the unemployment rate to 7.9 per cent. Nonetheless, the rate of joblessness remains elevated and near levels observed during the recession.





While total employment improved in April, gains were again concentrated in the part-time sector. Part-time employment rose 1.8 per cent during the month to 534,800 persons, representing a third consecutive monthly gain. Full-time employment remained virtually unchanged in April, but has generally trended lower since the third quarter 2010. Although employment levels have rebounded to peak levels, the increased share of part-time work means that actual labour hours continue to lag.




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Horn River shale gas potential doubles British Columbia's reserves





Additions from British Columbia`s prolific Horn River basin have doubled that province`s natural gas resources, according to a new report by provincial and national energy regulators.




The first public study of its kind, released Friday morning by the National Energy Board, pegs Horn River volumes at 78 trillion cubic feet of shale gas in the northeastern corner of B.C.




That compares to a provincial estimate of 52 tcf released five years ago.




The 2006 report did not include unconventional shale gas resources, said Jim Davidson, team leader of energy supply with the NEB.




The primary implication of the study is it is a significantly larger resource availability for B.C., he said.





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B.C. pushes up Canada's home sales forecast




Unexpectedly strong sales in British Columbia have forced the Canadian Real Estate Association to tweak its forecast for 2011.




The Ottawa-based group, which represents about 100 boards across the country, said national sales should reach 441,100 units in 2011 ` a decline of 1.3% from a year ago. The group had been predicting a 1.6% drop back in February. By 2012, CREA is predicting a rebound with sales climbing 2.6% to 452,500 units.







`Although sales activity in the first quarter of 2011 came in largely as expected, multi-million property sales in Greater Vancouver have surged unexpectedly,` said CREA, adding the surge has skewed both sales and prices on a national level.





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B.C. approaches a 'mining renaissance'




British Columbia's mining sector in 2010 staged a considerable rebound from 2009's recession and is poised for its most significant growth phase in perhaps a generation, according to a new report released Tuesday by the business consulting firm PwC.




The B.C.-based operations of mining companies took in $7.9 billion in revenue and $3.7 billion in pre-tax earnings in 2010, a substantial increase on the recession year of 2009 and nearly touching the record of $8.4 billion in 2008.




Results were fuelled by high prices for coal and copper, B.C.'s most abundant products, which are in high demand in China and other emerging economies that led the world out of recession.



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First Nations stand ground



In case their unequivocal message hasn`t been received, British Columbia`s First Nations are in Calgary this week to make it clear to the board of directors of Enbridge Inc., Enbridge`s annual meeting of shareholders and members of the broader oil community that the proposed $5.5-billion Northern Gateway pipeline is not going forward.





It will be a difficult message to accept. The pipeline between the oil sands in Alberta and Kitimat on the northern coast of B.C. is a big plank in the oil-and-gas industry`s strategy to develop a new market for its products in Asia, a major part of Enbridge`s growth strategy, a key piece of strategic infrastructure for all of Canada, and a major job creator for Western Canada.





But it`s a message that requires full consideration.





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